Shattered Dreams: The Economic Impact of Eliminating DACA

We present a novel imputation for legal immigrant status in 2023, which identifies likely DACA recipients, and provide estimates of the short-term and long-term income losses stemming from the potential elimination of the Deferred Action for Childhood Arrivals (DACA) program. Our estimates account for the youth of DACA recipients, which implies that their current earnings underestimate their potential lifetime contribution to the U.S. economy due to incomplete educational attainment and the early stage of their professional careers. We estimate that losing work authorization would lower the income of the average DACA recipient by about $5,300 annually, adding up to $2.9 billion for the approximately 530,000 current recipients. Cumulatively over their remaining working lives, the income loss grows to approximately $70,000 per recipient and $38 billion in the aggregate. If the elimination of the program leads to deportation and a complete exit from the U.S. labor market, per-person income losses increase six-fold to $32,000 annually, $430,000 over the lifetime, and $233 billion in aggregate. The losses become substantially larger if the program's rescission also affects the earnings of spouses and other Dreamers (undocumented immigrants who entered the country as children).